Casey v Morane Ltd

An agreed apportionment of responsibility for a workplace accident may be relevant to the causation of later financial loss. Ordinarily, a disciplinary penalty and resulting loss of pay following an objectively justified review of the employee’s conduct will be attributed to that conduct. However, where the disciplinary outcome is inconsistent with the binding apportionment, and the unsafe practice was known or condoned by the employer, the employer’s breach may remain a real and effective cause of demotion-related loss. The disciplinary proceedings need not break the chain of causation. Failure to challenge the demotion through employment or contractual proceedings does not necessarily prevent recovery.

The claimant suffered serious injury while cleaning moving machinery at work. His employer later disciplined and demoted him, causing a substantial reduction in earnings. In the personal injury proceedings, liability was compromised under the Law Reform (Contributory Negligence) Act, 1945, with the employer accepting 85% responsibility and the claimant 15% contributory negligence.

At the assessment of damages, the Oxford County Court awarded damages including 85% of the claimant’s past and future demotion-related losses. The employer appealed, arguing that the losses were caused solely by the claimant’s misconduct and the disciplinary decision. The central issue was whether the demotion and resulting loss of earnings were caused by the employer’s breach or constituted an intervening cause.

Appeal dismissed with costs. The three Lord Justices reached the same result on the unusual facts of the case.

1. The consent order apportioning liability was binding on the parties and the court. It established that the employer bore 85% responsibility for the accident and that the claimant bore 15%. The employer could not treat that allocation as irrelevant to causation or avoid its effect by suggesting that insurers had made the settlement decision.
2. Lord Justice Mance explained in his separate reasoning that the ordinary but-for inquiry is not always sufficient where several factors combine to produce loss. The court must select the predominant, real or effective cause by applying common sense and considering the nature of the issue, its context and the purpose for which causation is being assessed. He referred to Stapley v Gypsum Mines [1953] AC 663 and South Australia Asset Management Corp. v. York Monagu Ltd. [1997] AC 191.
3. Ordinarily, a disciplinary sanction objectively justified by an employee’s conduct would be attributed to that conduct. Here, however, the accepted apportionment and the evidence that the unsafe practice was known or condoned made the disciplinary outcome inconsistent with the employer’s position in the injury claim. The claimant’s conduct could not be treated as the predominant or sole cause of the demotion and loss of pay.
4. Lord Justice Henry held that it was artificial to isolate the claimant’s conduct as the sole cause of the demotion. Lord Justice Mance regarded the loss as an additional disadvantage flowing from the accident. Lord Justice Gibson considered that there was evidence supporting the finding that the employer’s breach caused the loss and that the disciplinary proceedings did not break the chain of causation.
5. The claimant’s failure to bring unfair dismissal or contractual proceedings, or to treat the demotion as repudiating the employment contract, did not preclude recovery in the tort claim. The employer was therefore answerable for 85% of all recoverable loss, including 85% of the demotion-related items quantified at £110,195.

1. Court of Appeal (Civil Division): The appeal was dismissed with costs. The judgment is reported at [2000] EWCA Civ 147.
2. Oxford County Court: His Honour Judge Julian Hall awarded the claimant £119,000, including damages for demotion-related loss of earnings, reduced by 15% for contributory negligence.